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9 Iyar 5761 - May 2, 2001 | Mordecai Plaut, director Published Weekly
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NEWS
Observations: Hi-Tech Without a Mortgage
by V. Mandosh

The hi-tech crisis has had an effect on the housing market as well. Real estate was already in a slump before the crisis hit, and any financial difficulties within a certain sector make the situation more acute.

According to a report in Yediot Acharonot, during the first two months of the fiscal year a 40 percent increase was posted in the number of requests by mortgage banks to foreclose apartments belonging to borrowers who were unable to make their mortgage payments.

The banks filed requests to foreclose apartments of 1,200 families who failed to make their mortgage payments. The newspaper revealed that hi-tech professionals who had purchased prestigious apartments and have faced financial difficulties in recent months are also included among those who have been unable to pay back their mortgage loans.

Bank Tefachot Managing Director Chaim Freilichman told Yediot Acharonot that difficulties in repaying mortgage loans are usually typical of peripheral areas of the country where unemployment rates have been relatively high for a prolonged period. He says the banks have provided particularly high percentage financing in these areas over recent years. But now, apartment buyers in prestigious central areas who were earning high salaries at the time they took the mortgage loan have encountered difficulties. "With the wave of layoffs in high tech, the uncertainty and the pay reductions, there have been problems making monthly payments in this price range," says Freilichman.

 

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